TY - JOUR
T1 - Simultaneous offers and the inefficiency of bargaining
T2 - A two-period example
AU - Dekel, Eddie
N1 - Funding Information:
* I thank Elchanan Ben-Porath, Joseph Farrell, David Kreps, and an associate editor for helpful conservations and comments. Financial support from the Miller Institute for Basic Research in Science and NSF Grant SES-8808133 is gratefully acknowledged. i GUI, Sonnenschein. and Wilson 1161 have shown that for a general class of these models (excluding Admati and Perry [ 11) the delay disappears as the time between offers goes to zero.
PY - 1990/4
Y1 - 1990/4
N2 - It is shown that the Pareto optimal outcomes in a two period simultaneous move bargaining model violate forwards induction rationality when the players are sufficiently patient. This bargaining model describes a situation where a principal is represented by an agent whose flexibility is restricted. Hence, a bargaining process with such agents can create costly delays. The result also provides another example of the power of forwards induction and stability.
AB - It is shown that the Pareto optimal outcomes in a two period simultaneous move bargaining model violate forwards induction rationality when the players are sufficiently patient. This bargaining model describes a situation where a principal is represented by an agent whose flexibility is restricted. Hence, a bargaining process with such agents can create costly delays. The result also provides another example of the power of forwards induction and stability.
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U2 - 10.1016/0022-0531(90)90004-4
DO - 10.1016/0022-0531(90)90004-4
M3 - Article
AN - SCOPUS:38249018688
SN - 0022-0531
VL - 50
SP - 300
EP - 308
JO - Journal of Economic Theory
JF - Journal of Economic Theory
IS - 2
ER -